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Brown's Brain Trust May Eclipse Cabinet When He Succeeds Blair

By Gonzalo Vina

June 20 (Bloomberg) -- For a man with a reputation as a loner who largely keeps his own counsel, Gordon Brown will bring a tight and battle-hardened group of advisers with him when he succeeds Tony Blair as Britain's prime minister next week.

Brown, 56, currently the chancellor of the exchequer, has spent the past decade building a brain trust that leans heavily on a dozen or so aides, many of whom he plucked for his team before their 30th birthdays.

The team -- which includes junior ministers Ed Balls and Ed Miliband, spokesman Damian McBride, and former banker Shriti Vadera -- brings with it a fierce personal commitment to the new prime minister. ``What unites these people is a very strong sense of loyalty: They have stuck by Brown after a long period of waiting,'' said William Keegan, a friend of the chancellor for two decades and author of ``The Prudence of Mr. Gordon Brown.''

Regardless of whether Balls and Miliband join the Cabinet after Brown becomes prime minister June 27, their influence will eclipse that of the ministers given the key government portfolios. Along with a handful of more senior advisers who work in the shadows, including an American political consultant, their task is to reinvigorate a flagging Labour Party before the next general election.

Beyond the Boundaries

The group's influence has been felt across government, often extending beyond the boundaries of the Treasury that Brown has run for 10 years. Brown and his advisers have used the Treasury's control of budgets to shape education, health and transport policy and even the fight against international terrorism.

``This is a group of people who have been together quite a long time and what has come out of that is a very political way of thinking,'' said Sunder Katwala, general secretary of the Fabian Society, which has advised Brown on policies. ``They are the inventors of the Labour domestic-policy agenda.''

None of Brown's back-room aides speaks to the press. The group has come under attack for its secrecy, as has Brown himself, according to Derek Scott, a former economic adviser to Blair. He accused Brown of being ``obstructive and deceitful'' in his 2004 book ``Off Whitehall.''

Scott described how Brown excluded Blair from economic- policy planning. A month before presenting his second budget, in 1998, Blair summoned Brown to his office in Downing Street to ask for details of what would be announced.

`Give Us a Hint'

Brown pulled his paper toward his chest and replied, ``I haven't made up my mind yet,'' according to Scott, who was at the meeting. Blair replied: ``Give us a hint, Gordon.'' None was forthcoming.

Nobody has made a bigger mark on Brown's thinking as finance minister than Balls, now a deputy minister under the chancellor at the Treasury. He joined Brown as an adviser on economic policy when Labour was still in opposition in 1994 after studying under former U.S. Treasury Secretary Larry Summers during a sabbatical at Harvard University.

Balls, 40, who rarely takes a lunch break during his 14- hour work days, has given 35 speeches in just over a year in office, more than his predecessors did in the previous 5 1/2 years.

Balls is credited with convincing Brown to hand power over interest rates from the Treasury to the Bank of England in 1997, advocating the move as early as 1992 in a pamphlet for the Fabian Society, the group that provides the intellectual underpinnings for Labour Party policies. He also lobbied Brown to restrain spending during his early years in office, helping Labour break with its past reputation for economic mismanagement.

Balls's Influence

It also was Balls who turned Brown against adopting the euro when a dozen European nations started using the currency in 1999, according to Keegan. It would be ``difficult to overestimate'' the influence of the former journalist, Keegan said.

Vadera, 44, formerly at UBS AG, has overseen many of the more technical aspects of Treasury policy. She managed the sale of government defense-research company Qinetiq, the partial sale of the London Underground and arranged a bond sale to raise money to vaccinate poor children in Africa.

Miliband, 37, brother of Environment Secretary David Miliband, joined Brown's team in 1994 with Balls and went on to chair the chancellor's Council of Economic Advisers, responsible for long-term policy. In 2005 he was selected to stand for a parliamentary seat in Doncaster, northern England, that Labour has held since 1909. After winning election, he became a minister in charge of encouraging voluntary groups in May 2006.

Other Advisers

Other close Brown advisers include Sue Nye, 51, who runs the chancellor's private office, picking his suits and controlling access to him, and McBride, 31, his political spokesman, who is a regular in the bars of Westminster and is known for briefing journalists by mobile-phone text message.

There's also Spencer Livermore, 31, who was appointed as a special adviser by Brown in 2005 after Miliband left the Treasury. As Brown's chief political strategist, Livermore has input into almost all of Brown's policies and is a contender to head the Downing Street policy unit once Brown becomes prime minister.

At least some of Brown's advisers work more in the shadows. One is Bob Shrum, 63. In the U.S., the speechwriter and political strategist maintains a high profile; he has worked for eight Democratic presidential candidates. In the U.K, where he has advised people close to Brown ahead of the handover with Blair, he plays a quieter role.

Attacking Cameron

Among other things, Shrum spoke last year at a private seminar for the Smith Institute, a London-based charity run by Brown's university friend Wilf Stevenson, on how to attack David Cameron, the leader of the main opposition Conservative Party. Cameron, 40, is Brown's most likely opponent at the next election, which must be held no later than mid-2010.

Brown has also enlisted the help of outsiders from industry and finance to work on issue-specific reports that guide the government's policy.

Kate Barker, 50, one of the nine members of the Bank of England Monetary Policy Committee and the former chief economist at the Confederation of British Industry, proposed changes to urban planning laws that constrain house building.

Sandy Leitch, 60, the former chief executive officer of insurer Zurich AG's U.K. operation, recommended more spending on education, while a report by the former chief executive of National Westminster Bank Plc, Derek Wanless, 59, prompted the government to raise taxes to fund the National Health Service in 2002.

Shaping Policy

None are part of Brown's inner circle, though their reports and recommendations have shaped some of the most important decisions the Treasury has made in the past decade.

``He likes to speak to people one-to-one or in small groups, unlike Blair,'' said Neal Lawson, who runs the political pressure group Compass and has worked as an adviser to Brown. ``He may not always be that nice to the people he's talking to, but at least you get the sense that he is listening.''

Andrew Turnbull, who worked with Brown for four years until 2002 before becoming the government's most senior civil servant, said in March that Brown operated with ``Stalinist ruthlessness'' and treats others with ``complete contempt.''

Will Hutton, a friend of Brown for two decades and director of the Work Foundation, a research institute, said Brown understands his circle must expand to take in a broader range of advice. The government's chief civil servant, Gus O'Donnell, is forming a unit to give Brown more practical mechanisms to communicate with the colleagues and the public, Hutton said.

``It will be a judicious mix of old and new,'' Hutton said of the group apt to surround Brown in the future. ``Gordon trusts only very few people, but he does understand that has been counterproductive.''

To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net.

Last Updated: June 19, 2007 19:06 EDT

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